If Andy Burnham’s government follows the priorities it has outlined during its first weeks in office, the strongest investment themes are likely to be those that align with reindustrialisation, regional development, infrastructure and public investment, rather than the more consumer-led growth seen in recent years.
Here is how I would rank the sectors.
Sector Outlook Why
Defence ★★★★★ Significant commitment to rebuild domestic manufacturing and defence capability.
Infrastructure & Construction ★★★★★ Major housebuilding, transport and regional investment programmes.
Engineering & Industrial Manufacturing ★★★★★ Policy emphasis on rebuilding UK industrial capacity and reshoring production.
Utilities & Water ★★★★☆ Greater government involvement and investment in infrastructure.
Renewable Energy & Grid ★★★★☆ Continued investment in lower-cost energy and modernisation of the electricity system.
Regional Property ★★★★☆ Devolution and investment outside London could boost northern cities.
AI & Technology ★★★★☆ Government has indicated AI will remain a strategic priority, although organised differently within government.
Healthcare & Social Care ★★★★☆ Expansion of care services and NHS investment should support suppliers and operators.
1. Defence
This is probably the clearest beneficiary.
Burnham has repeatedly argued Britain should manufacture more of its own:
defence equipment
steel
aerospace components
strategic technologies
Companies involved in defence electronics, engineering and military support services could benefit if spending rises as expected.
2. Infrastructure and Construction
This could be one of the largest beneficiaries.
The government has discussed:
large-scale council house building
transport improvements
regional infrastructure
regeneration projects
Potential beneficiaries include:
construction firms
aggregates
cement producers
building materials
engineering consultants
civil engineering contractors.
3. Renewable Energy
Although Burnham has taken a pragmatic approach to energy security, the direction still favours:
electricity networks
energy storage
heat pumps
renewable generation
grid upgrades
Utilities and infrastructure funds could benefit from long-term capital investment.
4. Northern and Regional Growth
One of Burnham’s defining political themes has been devolving power away from Westminster.
That suggests stronger growth prospects for cities such as:
Manchester
Leeds
Liverpool
Newcastle
Sheffield
This could support:
commercial property
logistics
transport
regional banks
local housebuilders.
5. Artificial Intelligence
Although the Department for Science, Innovation and Technology is being reorganised, AI remains an explicit priority.
Likely beneficiaries include:
UK software companies
cybersecurity
cloud infrastructure
data centres
automation providers.
Areas that may face headwinds
These sectors could be more challenging if regulation or taxation tightens:
Large multinational consumer businesses
Privatised utilities (depending on reforms)
Companies relying heavily on low-tax structures
Some fossil-fuel producers if environmental policies strengthen.
International investments that may benefit
The policies are also supportive of industries beyond the UK:
European defence manufacturers
Industrial automation companies
Copper producers
Electrical equipment manufacturers
Rare-earth and critical minerals
Grid equipment suppliers
Robotics businesses
These sectors are linked to defence, electrification and reindustrialisation trends rather than solely to UK domestic spending.
A model portfolio
If I were positioning a long-term portfolio specifically for a Burnham-led government, I might consider something along these lines:
25% Defence & aerospace
20% Infrastructure and construction
15% Industrial engineering
15% Utilities and energy infrastructure
10% AI and digital infrastructure
10% Healthcare and life sciences
5% Cash or short-dated gilts to provide flexibility
Lee Green with the strong use of AI